Volt Information Sciences (VOLT) 11 Sep 202020 Q3 Earnings call transcript

Greetings, and welcome to Volt Information Sciences Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Relations. Investor Noyons, Joe

and for everyone. Quarter Volt Earnings Lauren, joining Fiscal you us Call. today Information good you, Thank afternoon, for XXXX Thank Sciences Third

on Officer; Perneau, call Chief and issued After this and are a the closed Officer. Mueller, Linda EDGAR market the as the year On a XXXX. Chief website is available Vice today announcing well as fiscal The Financial Executive volt.com, at the afternoon, and the President of its the third results Form website quarter SEC press for filed Herb Senior President as Company's release Company X-K. release

financial the management Private materially today’s or over prepared Also from turn provide call release Sciences' of earnings A afternoon. SEC reconciliation the more XXXX. investors. of business Perneau. factors, Litigation Volt of you results a of beginning Volt's and With like those discussion including, today risks remind potential on statements Reform variety the Linda? measures for CEO, is COVID-XX may issued to Linda this which press not information like to for I measures to in to operations. Actual useful Company’s non-GAAP pandemic results the made operating President GAAP included of today's detailed due differ you impacts to that, and would to limited that the on that call, financial certain will future filings our with believe will reference to, the refer the measures, a condition. we those be Before are but Securities I implied of and the remarks, We recent Act projected some Information forward-looking would under made

open the of preserve I you, that overview position. we will Volt’s continues initiatives as and I some Herb detailed strategic improve through Joe, COVID-XX results, healthy. specifically making business progress commentary financial of will move operations third fiscal recent more of everyone remain And hope taken several the briefly the call. fiscal our steps the seeing Volt’s earnings impact I some our and Today, and our safe I are to call on we quarter health our the impact with additional fourth will on ongoing we quarter the crisis. provide trends and Thank our then to third a XXXX despite high-level will are financial insights quarter. to provide welcome COVID-XX of on into we finally, provide have performance.

The realized Let an first continued month-over-month of me the encouraged economy the businesses with overview gradually reopened. slowly quarter. recovered and QX. moderate as start to were we have throughout effects third improvement of But COVID-XX

return operations beyond and COVID extended the navigate April the of we call, proud to prior incredibly work, revenue and be financial shared secured to to May. and taken point multiple economic full earnings our position. we a of a third continue to quarter quite of our resume successful the actions have behind to improving XX% impact align SG&A low during current back swift wins. ongoing of with operations us, of any recovery As Their with the of to to Volt month new in be further to in proven enabled The our clients the colleagues, uncertainties. whom our efforts be allowed better trough of thousands COVID-XX, is business decisive remain in health expect quarter unforeseen I market decline the Overall, believe XX.X%. all confidently what hitting After and labor to employees May, during gradual. negative we prolonged and us resurgence negative will although saw rebound XX% progression July believe in Barring worst June we the we

freeze; achieving EBITDA America. of Phase and our July reductions As a the for of retirement additional the throughout measures and annual of cuts X months of salary long-term closure compensation; temporary temporary based in X and reported in of quarter. combined extension the Phase company’s suspension estate short-term furlough headcount reminder, in periods; reduction with X for the were accounts; a match pay real of and series integral our the and previously during positive certain hiring actions, consolidation directors; incentive call, and XXXX introduced adjusted reduced a and including fees Phase underutilized us fiscal reduction, North June overall for we myself full quarter’s last broad and Herb; and/or to actions These

ramped I Herb wins, have technical and sequential We reported turn well as as continuing financials, our accelerating the technology and branch Volt enhancements, reduction SG&A even these month-to-month to business the which COVID-XX to successful talk a and now improvement. in cases, are lingering XXXX, in impacts, been track negative detail discuss will face over finally, on And business quickly commercial our performance. our few Herb? business we of new a our in and to XXXX call of for and revenue profitability. networks, rising have minutes. securing greater revenue many throughout the the about I’ll retail in individual unit contributed previously in to expanding

North XXXX American expanding everyone. new May $XX COVID revenue was impact a the afternoon, the the quarter and business improving to is the increased. XX%, returning of quarter. to Revenue associated down decline $XXX.X our $XX July was winning XX.X%. XX.X% The million Linda, million be Majority point a sequentially of to We customers of impact clients, trend revenue was have low combination revenues June with work, Staffing or in a third May, logos. XX%, Thank hit million the fiscal and result existing estimate of revenue COVID-XX of segment. existing good with After in Adjusted $XX and for million. approximately year-over-year. you, decreased third for

by COVID. we be line Hire which had seen Direct Our quarter we two deferred, continues QX. capturing opportunities in of In business began to impacted

For were down we quarter, the XX%.

during However, XX% Hire improvement from was XX% XX%. down was quarter trend We May year trend. the and revenue only Direct quarter. the only with improved continuing July the August Preliminary last down monthly the monthly down revenue showing positive during

North was or represented Looking segment results. overall XX% $XXX.X at American revenue Adjusted during of million third million. this business $XX.X was the Staffing from income segment our during decreased Revenue revenue and the operating quarter. million quarter. XX.X% $X.X

last reductions as had incurred the teams and the restructuring we mentioned, across facility and opportunities. to The existing compared winning previously headcount expanding retail well Linda charges while closures impairment remotely. could working year, new the throughout due support our and pandemic of where in as quarter, clients, success branch million larger XX,XXX segment clients $X.X network, this logos markets to specific As

Excluding cost, these impact increased the income X.X% operating year-over-year. of

number income Our of International third Staffing year-over-year, in offset work revenue, X% changes quarter, associated Adjusted operating contract quarter in operating labor, a and American of both the was Belgium incremental business last our reported been a the X.X% about $X.X legislation impact COVID, The recovery $XXX,XXX. was from small and clients headcount statutory COVID-XX X% as million revenue improvement the the revenue well UK performance up revenue to as to shifting of with MSP in slowed has total result the The XX% of clients total UK, were million, of by Singapore, existing decrease pending within in challenges certain $XXX,XXX. revenue the in expansion with as offsetting COVID. heavily income impacts decreased of which is partially of to decreases. actually during reductions over XX.X% for related decreased into has of COVID-XX clients the by represented segment. UK which orders At by Adjusted quarter. in revenue primarily North the revenue related this of XX.X offset adjustments by attributable due which year our impacted primarily and economy

Moving margin the ago XX.X%, was the quarter. the year quarter P&L. to down in Gross for XX.X% compared third

Benefiting exited in in was in gross more compensation favorable The able prior for to Excluding in the $XXX,XXX travel margin cost, margin we in XX.X%. cost approximately claims driver perspective basis in approximately $XXX,XXX including SG&A a the from travel XX fiscal $XX.X highly to from of headcount was in compared adjustment make liability year, environment. and lower our labor expenses for solid to declines were XXXX. pricing facility reduced The a million, disciplined offset had related the on and competitive due to payroll tax working incentives, consulting a and we gross primary rates. change to and points than business expense reduced concessions lower quarter primarily to million pricing from fees, $X.X due and relating cost lower related increased supplies. workers' medical remotely and third third the reductions, $XX.X restrictions million COVID-XX quarter was strategic cost decrease approach, in

Some on lease a may of a rules. offset to were real deferred estate one-time These $XXX,XXX partially expenses and by increase elimination offset accounting these decreases gain were the not in the recur savings of going basis a due under new forward.

As exiting this emphasize quarter and markets. $X.X of Impairment a the want quarters cost of XXXX. will can million branch million of business and a however in sustainably impairment we increased of exiting in to charges, fiscal $X.X reminder, change of result the due remotely, XXXX, effectively as third comparative primarily we locations fiscal impact recur I clients are where fourth our that and to not physical consolidating support operations. the

quarter $X.X and with markets business primarily XXXX. without $X.X locations. incurred the Restructuring severance third due exit decreased fiscal cost brick prepared third our fiscal and restructuring cost of are million million and of of in XXXX, care expand support to quarter of severance in the We and customer mortar some in actual well the having to

net $X.X $X.X or The we or For fiscal reduction XXXX. to net $X.XX to compared the $X.XX in third of per restructuring of XXXX quarter cost XXXX, reported GAAP $X.XX the million cost of fiscal of loss a of per ongoing the $X.X during a to complete. or and loss million impairment share quarter related loss we efforts GAAP the third have third share, of quarter included million

from year-over-year, to as the EBITDA to $X that well the year-over-year we quarter when accomplish we of million as quarter, from third able consider continue year especially improvement FY positive the pressure a improvement are result sequentially Adjusted addition to each This improvement a as top-line amidst a significant the prior the and was million, for million improve In improvement on pandemic. $X.X quarter. ongoing you XXXX our is sequential $X.X a QX.

cash a cash to million and fiscal $XX.X few end million XXXX, and short-term had cash and the third on $XX.X we equivalents Moving restricted key the in in the At of flow investments. balance an sheet. from and quarter items of additional

million $XX.X at in Our long-term to debt under million $XX deferred quarter remain tax of $XX.X the same total million April result last from a payroll at Act. liquidity as as available Cares and July payments the increased

working strong our addition, has improved job quarter. efforts discipline to maintaining to a team pressure the done working a closely have stretch payment mitigate from clients terms. with Through In DSOs days fantastic previous three our capital

to a Cares current the in to this reminder, of of million Act defer $XX this payment Half our were to XXXX of the likely to payments $XX generated at half action of flow provides year. quarter $XXX,XXX. taxes. we the XX the of of able will calendar security for calendar passage million flexibility legislation our the due on operations capital XXXX. As payroll, portion greater the we defer calendar financial due of March, payroll Based other social at with XXXX This will under third We the in the calendar XX cash Volt expenditures in from be million and end the $X.X balance end months. of due

are to in these want million out going merely point XXXX imposed that more cost FY track initiatives of million forward. our we to confident transformative a remain changes we fiscal not COVID are our for $XX Next and annual saving an $XX interim on cost total XXXX measures, reductions. million $XX or but in cost year will additional and saving from structure realize strategic savings in I cost

structure experience than dollars to for favorable to offsetting significantly call have emerge quarter. we substantive allowing foundation gross have profitability these profit decisions to our us we in In beginning the been now streamlined and the early Volt for and COVID-related operations improved I to financial in in swift we effects are third With cost over history. decrease difficult conclusion, we our actions, returning the more improved resulted recent Linda. actions have and stronger results in the The will turn XXXX. builds and taken than already back

Thank you, Herb.

the has in been to cost beginning on structure our to opportunities our focus our impending the our Turning to of as flexibility with on initiatives, key revenue economy decline, the rebounds. aligning since capitalize maintaining structure end our pandemic, the while

COVID to now operate more ever, are differently. forced as important enhancements than technological Our us

field and helping Our the are and and experience add investments employees this sourcing broaden in arena our improve efforts with clients, to to value overall Volt. our recruiting

and the leverage an field we us score performance. retention quarter satisfaction. we results, tools these two These promoter implemented gives the third months many next improve two real-time candidate and examples and redeployment the tool The productivity will expedite specifically, opportunities indication client of several improve over and bolster functional to of of continue capture represent to the employee to feedback. the only net During that enhancements to onboarding aspects designed experience, ability also enable technology satisfaction and

of business. the We on continue to make growth expansion and retail progress the

higher revenue pursuits performance crisis, specific commercial the the the retail on nature to larger of to the be As proven the a had network. and to we technical sustainable business the the has transactional, and due clients. shorter and to over control team’s relates sales Throughout branch seen retail roughly minimized business decline wins business, ability much margin this our revenue more stable versus with term the X% have new cycle have reminder, across success replacement. retail transactional XX% this The to more

an as business. has points same of the nearly quarter matured on to American basis points model XXX As metrics, months improved accountability and gross shift third our North of last branch the everyone the our period to revenue, also model XX% total retail now mentality, have for our this XXX result staffing disciplined non-retail over margins margins from to XX gross Overall a past activity network basis key year. average in a higher improvement sells and XXX than was represents

as of and sales business employees on thousands to In have with our work, been clients, well expansion new retail expansion, team to wins. safely existing focused field addition operations returning opportunities as

versus we quarter, varying have seen the third in clients capacity our at more have On second report quarter a dormant that many existing During quarter. operating pre-COVID note, much the the of third of we the XX% previously have clients, third pre-COVID levels accelerated the at our current and In an lower than majority operations timeframe. positive teams total, exceed levels. who placements more quarter second even headcount are recovery more pleased in the although headcount XX% in quarter the made to resumed are

Our serviced. markets were clients solidifying opportunities successful teams in existing with in both have previously not

an growth Some to well include an for due were substantial given a the California existing we in opening to quickly The this local examples quickly by headcount Texas expand outstanding ramped performed asked door and Texas. to client in Midwest. additional of the team exceptionally were and opportunity the opportunity in we XXX relationship very

progress the where in first made we diligently the as significant and and Our new XX provider another in over efforts have strengthen staffing to the the past asked result working of relationship, in their and four has equipment. Volt existing to a for personal example, protection client been distribution support a months recently to became expand people and team they program top critical years several the were of manufacturing assist hundred they location time tier built a

lines opportunities their in as new also Predominantly of the or many the VCG acquisitions. included under or of the healthcare result of arena, divisions expansion program a expansion realized teams Our existing of addition the transitioning MSP clients. within Volt the employees service

initially of team multiple new example and quarter. XXX to in over a call meetings, as short May, in the due role on win in team’s of RFP a tours in One during closed New headcount. us is healthcare an quality industries the in business experience and a sales placing to Since decisions a the accelerated latter the the and early implementations organization ecommerce. client to a started and talent such deals West in quarter with put quickly the part site The period centers, Coast. door time, success allowed wins consumer we of the healthcare key third also played acceleration

Volt for that improvements, be and shutdowns. the our clients, although of colleagues incremental to site fairs client return presentations, family light virtual anticipate slowly as was locations nearly begun branch quarter. above The Again, recently, continued we to with as daily. our market have Our phased needs slowly the reopened. offset a reflects in team balance drive-through been meaningful slower and a North as and who already improvement geographies the local the candidate meet the necessary personal to demands. share ecommerce and fourth to quarter network the the QBRs X and this Staffing we of including remotely and weeks and client alone, today of in from headcount Zoom on to will a not The out demands and continue to non-holiday XX Early impacts. XXX the demand keep the well and execute than wrote of have least, another changing were of we to example partnered provider. for lingering We the has have so in Simultaneously, American headcount to for full and differently. carefully but taking efforts our adopted of and virtual site another pipeline allowed consumer revenue was occasion where lieu is prepared partially ensure of and COVID-XX the do large win Volt events progress and tours to processes competitor plan markets in-person In to job quarter indications teams certain most have referenced grew in us corporate physical of properly the week-over-week adjusted closures rate expected. safe it’s percentage work work well our segment week-over-week our Last colleagues operate the meetings

We in uncertainty, trends due facility seeing. COVID and guidance of perspective provide I is fourth events unexpected client revenue or cost adjusted cases, and with are Texas or ongoing quarter. August providing results. total unexpected are business continuing also positive shift to experienced Because facility July partial or from for natural brief on savings will to impacts not recent experience Preliminary California. due product however efforts, to client we we our are to some most due this line in challenges, shutdowns in closures closures recently supply

show continuing the pre-COVID quarter the the to close to levels. improved performance expect fourth We compared gap third to quarter, to

challenging Given our we clients. strong onset trending adjusted the health and of our employees am the to and the of rapidly positive been our incredibly been EBITDA for colleagues, resilience globe of and number They and times. thankful quarter. ever changing evolving solutions the clients partners address dedication, and our each. continues teams Since our cost demonstrated savings welfare are discussed, providing crisis, previously the have have these actions a the broad health range has for and across one priority field our toward I needs our be creative and the throughout innovative of in to passion to

of having are is this great the the our during awards teams Some received quarter. impacts examples the

Workforce XX Health the last months. the certain; XXXX. Provider staffing thing was Volt and our by one Volt for transformation Pharma America’s of international firms undergone Our XXXX. by best the significant team One as of Forbes Pharmaceutical entire over named And has is year was recognized organization Global as

operationally are We and flexible. agile and strategically more

for and We and keen inclusion for identity equity diversity, industry a up an have leader developed as all. stand

effective solutions. to are deliver workforce poised and We innovative well

and to We and additional enabling partner opportunities. have relationships us strengthened client expand capture

to digital positioning sales and mentality markets, diverse a We enhance in well future. and broad framework, have now all base across to and strong selectively deliver to service the Volt continue clients technology of all and our a

operator Let the me the now session. turn the call to Operator? Q&A back to begin

of & [Operator with the Instructions] Sidoti Our first line question comes Company. from Josh Vogel

your may You with proceed question.

Herbert, Good hope are Thank well. you. you and doing Linda afternoon,

Thanks. Josh. great, Doing

about of guess, you size new the some you first maybe in in the I the XXX examples are quarters you headcount business said, on in pipeline, wondering acceleration compared wins the of both talk saw you XXX recent seeing And general. about question, and saw an as some Linda, was can how to Thank just that pipeline based I prospect to prior deals your you The just My wins Great. general. talk commentary, what and pre-COVID. you. gave if in some in you during and to examples,

Yes.

is what over say, been certainly XX we here really I’ll So, job been able robust That certainly the has months. accelerated have a business out built pipeline very and of of we past there as nice to more XX doing Josh, get new to have more front in those. about up we are I’ll pipeline, we prospects. think VWS. bit are is double They frame when them to specific little and pipelines our the very to our we continue year-on-year. this it size a you at of When They for way look selling – substantial individuals. monitor this

had the VWS the $XX from $XX in impact is exiting roughly call with decline million. levels it, So, third pre-COVID let’s million roughly quarter

actually was through the opportunities work as $XX people wins. made we to existing million team well back up putting that thousands of by as clients, business with expansion new have that in the quarter, So

non-retail That’s helpful. streaming of what size client a versus you. retail Thank about the opportunity? new just And

Yes.

more But and I say million as that’s clients not guideline; a it’s certainly transactional spend that generally $X as above then and and generally it retail a the case. always the retail, over would be kind They client. $X because than define spend be margin more are of higher or So, classified it’s could that. less. non-retail that’s we everything million still

type the should helps have enhancements streamline internally is future? thought enhancements July this tools makes we technology And particular. you see to now nice any of expect for more the partnerships stream partnerships about in doing to to maybe these prevalent this incents the make and maybe maybe and not in and theme But candidates that the Great. and Okay. or recruiting similar onboarding get and investment-wise for sense for is clients a announcement technology the obviously, you it had employee with and in a

to some quarters. as the more through expect the short-term, can vendors you In move these types of partnerships various we see with next several

months Okay. maybe these are seeing that on insights are regard received the and tools the side And being the meaningful you we improvement that two with any from in or quantifiable in data you to candidates particular by candidate that and how are announcement, have engagement. their clients now

Yes.

two So, of short time. months is relatively a period

necessarily So, call a In that our scenario, that there I trend. a our in this colleagues, curve there the I learning wouldn’t is sent from learning XX,XXX own it Volt given you a with field tell curve, surveys. is quarter, employees. as out we can well over as

So, we’ll data. continue continue look benchmark to monitor We’ll to this. for

promoter So and targets we in for ourselves then scores can make goals And those and of sure net that that we’ll around that goals. achieve we types of to build terms things. strategies can set those operational best-in-class some

to that. So, on certainly more come

think I it’s trends. early to a too specifically about little bit talk

social meet COVID-specific QX, scanning, quarter, created wondering that to that Last long-term were you and or opportunities think there about like is an talked still of if was requirement the in about seeking, opportunity demand, to here some are temperature any came if do that that Sure. that Sure. that opportunities be business distance for I new you seeing business? you cleaning

Yes.

long-term. that of that emerging that here skills those The the is in great skills great I become So, is created some our now QX wheelhouse have think, will news be part were of news.

roughly to of statistic you that about the interesting gave earlier our or for $X part The what COVID-specific actually foreseeable I that be that million will roles. part in future. the related was capabilities of less really were $XX that So, million,

out So, positions. solidifying non-COVID-related revenue the that a the is team and doing with job going there great of

the going on do throughout opportunity some rationalization is the of America, – North or and cost initiatives Alright. U.S. The cost outside an America? estate saving North to of there is real that the

do to take? want Herb, you

been continuing Yes, period that time. there. in obviously do see remote to this for are look Josh, what working of we can at and We’ve we

that an certainly we evaluating are ways. pros So at and looking cons ongoing But on is we There are basis. both that.

Okay. in you and give said And of impairment saving lastly, ongoing or on maybe sense based I restructuring initiatives? phases it did I the and but Herb, taken of just apologize, the if rationalization and missed that and and you mentioned cost charges any the three QX,

for did nothing to QX continuing definitive at this I point. evaluate are mention opportunities, we not anything there and but is

Well, questions. Great. Okay. taking my thanks for

Josh. Thanks,

Thanks.

reached question-and-answer session. [Operator back Linda of Perneau Instructions] we remarks. gentlemen, today’s over Ladies this like I turn for to call to and have would end the Ms. closing

Thank fiscal you, your fourth operator with quarter today's results January for and and you interest our you. thank when participation Thank speaking Stay look for continued to your you We report we to everybody Volt. again call in XXXX forward in in XXXX. safe. and

concludes This call. today's

your your may lines your a at have this for time. disconnect You Thank of and rest you great day. participation